ISLAMABAD: The Federal Board of Revenue (FBR) on Monday issued draft rules for providing evidence of identity for subscription of Pakistan Single Window (PSW).
(more…)Category: Top stories
Find top stories in this section. Pakistan Revenue brings you the latest and most important news from Pakistan and around the world, keeping you informed with key updates and insights.
-
Dollar hits fresh high at Rs200.93 as rupee free-fall continues
KARACHI: The US dollar hit fresh record high of Rs200.93 against the Pakistan Rupee (PKR) on Monday as political noise louder following an announcement of a mass-rally against the collation government led by PML-N.
The exchange rate witnessed a loss of 79 paisas in rupee value against the dollar to end at Rs200.93 from last Friday’s closing of Rs200.14 in interbank foreign exchange market.
READ MORE: Dollar touches new peak at Rs200.14
Analysts said that the political uncertainty caused further depreciation in rupee as former Prime Minister Imran Khan a day earlier announced a long march on May 25, 2022 against the present government.
The PML-N led government came to power after former Prime Minister Imran Khan was removed from the executive post after vote of confidence on April 10, 2022.
The present government inherited with serious economic challenges including falling foreign exchange reserves and ballooning current account deficit.
The rupee lost Rs16.25 or 8.8 per cent in 1 ½ months from Rs184.68 on April 08, 2022 to the present level of Rs200.93 on May 23, 2022.
READ MORE: Dollar hits record Rs200 at interbank trading
Last week the government announced to impose a complete ban on imports to support balance of payment and help rupee to stable. However, these measures appeared in failure as the exchange rate yet again deteriorated today massively.
Currency experts said that massive fall in foreign exchange reserves and high import payments were the major reasons behind rupee fall.
Pakistan’s foreign exchange reserves fell to $16.161 billion by the week ended May 13, 2022. The foreign exchange reserves of the country were $16.373 billion by week ended May 6, 2022.
READ MORE: Dollar makes new high Rs198.39 at interbank closing
The country’s foreign exchange reserves hit record high at $27.228 billion by the week ended August 27, 2021. Since then the foreign exchange reserves have depleted by $11.067 billion.
The official reserves of the State Bank witnessed a decline of $146 million to $10.163 billion by the week ended May 13, 2022 as compared with $10.309 billion a week ago.
The SBP reserves reached a record high at $20.145 billion by August 27, 2021. The official reserves also fell by around $10 billion after reaching record high. The official reserves of the SBP have been reduced to provide import payment cover for only 1.50 months.
READ MORE: Dollar peaks at Rs195.50 at midday interbank trading
The import bill of the country surged by 46.41 per cent to $65.49 billion during the first 10 months of the current fiscal year as compared with $44.73 billion in the corresponding months of the last fiscal year.
Pakistan is a net importer of petroleum products to meet its domestic demand. The country’s oil bill was $14.81 billion during the first nine months (July – March) 2021/2022 as compared with $7.55 billion in the corresponding period of the last fiscal year, showing a massive growth of 96 per cent. The oil bill is around 25 per cent of the total import bill of the country.
-
Dollar hits record high at Rs201 in midday trading
KARACHI: The US dollar made new record high of Rs201 against the Pakistan Rupee (PKR) during midday interbank trading on Monday May 23, 2022.
The exchange rate recorded 86 paisas fall in rupee value as dollar is being traded at Rs201. The rupee was closed at Rs200.14 by closing in interbank foreign exchange market last Friday i.e. May 20, 2022.
READ MORE: Dollar touches new peak at Rs200.14
Currency experts said that massive fall in foreign exchange reserves and high import payments were the major reasons behind rupee fall.
It is pertinent to mention that the government imposed a ban on all luxury items last week in order to manage balance of payment and support rupee value.
However, political noise has put pressure on exchange rate as PTI Chairman Imran Khan has given May 25, 2022 for a long march towards Islamabad.
READ MORE: Dollar hits record Rs200 at interbank trading
Pakistan’s foreign exchange reserves fell to $16.161 billion by the week ended May 13, 2022. The foreign exchange reserves of the country were $16.373 billion by week ended May 6, 2022.
The country’s foreign exchange reserves hit record high at $27.228 billion by the week ended August 27, 2021. Since then the foreign exchange reserves have depleted by $11.067 billion.
The official reserves of the State Bank witnessed a decline of $146 million to $10.163 billion by the week ended May 13, 2022 as compared with $10.309 billion a week ago.
READ MORE: Dollar makes new high Rs198.39 at interbank closing
The SBP reserves reached a record high at $20.145 billion by August 27, 2021. The official reserves also fell by around $10 billion after reaching record high. The official reserves of the SBP have been reduced to provide import payment cover for only 1.50 months.
READ MORE: Dollar peaks at Rs195.50 at midday interbank trading
The import bill of the country surged by 46.41 per cent to $65.49 billion during the first 10 months of the current fiscal year as compared with $44.73 billion in the corresponding months of the last fiscal year.
Pakistan is a net importer of petroleum products to meet its domestic demand. The country’s oil bill was $14.81 billion during the first nine months (July – March) 2021/2022 as compared with $7.55 billion in the corresponding period of the last fiscal year, showing a massive growth of 96 per cent. The oil bill is around 25 per cent of the total import bill of the country.
-
SBP may increase key policy rate by 100bps: poll
KARACHI: The State Bank of Pakistan (SBP) may increase key policy rate by 100 basis points in the upcoming monetary policy announcement (MPS) on May 23, 2022.
Topline Research conducted a poll from leading fund managers to assess their views on country’s economic outlook. Questions were asked on interest rate, inflation, currency, GDP growth and current account deficit outlook.
READ MORE: SBP may raise policy rate by 100bps to 13.25%
The SBP in the last monetary policy announcement on April 7, 2022 raised the policy rate by 250 basis points to 12.25 per cent.
Since the last Monetary Policy Statement (MPS) on April 7, 2022, secondary market rates including Treasury-Bill/Kibor rates have gone up by around 200 basis points due to uncertainty on removal of subsidies on petrol/diesel and continuation of IMF program.
It will also be interesting to see SBP’s stance as this will be the first monetary policy statement (MPS) after recent change in government and appointment of Dr. Murtaza Syed as new acting Governor SBP.
Interestingly in the latest T-Bill auction, cut-off yields declined for the first time after almost an year declining by 5-29bps with 3/6/12 T-Bills yields clocking in at 14.49 per cent, 14.70 per cent, and 14.75 per cent respectively.
READ MORE: Policy rate may rise as T-Bill yields increase sharply
As per the survey results, around 54 per cent of the participants expects an increase of 100bps, 14 per cent of the participants anticipate an increase of 150bps and 11 per cent expect an increase of 200bps or more. On other hand, only 13 per cent participants expect increase of 50bps while 9 per cent expect no change.
Participants remained divided on policy rate expectations by end of fiscal year 2022/2023. About 27 per cent of the participants expect policy rate to close at 13 per cent by end of fiscal year. About 41 per cent of the participant expect it to above 13 per cent while 32 per cent anticipate it to be below 13 per cent.
In terms of currency outlook, 39 per cent of the participants expect PKR/USD to close above 205 by FY23 end. About 9 per cent believe it will remain in the range of 200-205 by FY23 end. About 23 per cent expect it to close in between 195 to 200 while the remaining project it to be below Rs195.
About 27 per cent of the participants are expecting inflation of 13-14 per cent in FY23, 16 per cent expect it to be between 14-15 per cent, 4 per cent anticipate it to be above 15 per cent. The remainder of them are eyeing an inflation of lower than 13 per cent in FY23.
READ MORE: State Bank enhances frequency of MP reviews to eight
In terms of GDP growth, 7 per cent of the participants thinks that GDP growth will be below 3 per cent, 32 per cent of them expects it to be between 3-3.5 per cent, 23 per cent of the participant project it to be 3.5 per cent-4.0 per cent. The remainder of them anticipate it to be above 4 per cent.
Participants remained divided on the expectations of current account deficit forecast for FY23 as 46 per cent participants expect current account deficit to be in the range of US$12-15bn while 18 per cent participants anticipate it to above US$15bn. The remainder of them expect it to be below US$12bn.
Pakistan is currently facing tough economic times as depleting foreign exchange reserves, rising fiscal deficit amid huge petrol/diesel subsidy and indecisiveness by the new government on key economic measures is exacerbating economic issues.
READ MORE: Key policy rate goes up to 9.75%; SBP raises 250bps in less than month
It will key for government to take the required reform steps including removal of subsidy on petrol/diesel, measures to curb imports & improve tax collection. This will pave way for the resumption of IMF program which currently remain stalled and will result in dollar flows that could ease pressure on currency and foreign exchange reserves going forward.
Given concerns highlighted above along with rising inflation and weakening currency, we also anticipate SBP to raise the policy rate by 100bps.
-
Import ban not to apply on L/C issued before May 19, 2022
ISLAMABAD: The ministry of commerce on Saturday issued a clarification stating that the import ban will not be applicable on Bill of Lading (B/L) or Letter of Credit (L/C) issued prior to ban decision.
In order to address the balance of payments (BOP) situation in the country resulting from the increase in current account deficit (CAD) during the first 10 month of the current fiscal year 2021/2022, import of certain luxury and non-essential items has been prohibited, vide SRO 598(1)/2022 dated May 19, 2022.
READ MORE: Pakistan’s imports hit record high at $65.47 bn in 10 months
However, to address the concerns of certain business quarters with regard to the implementation of the said SRO, it is clarified that in terms of proviso to the paragraph-4 of the Import Policy Order, 2022, the imports where Bill of Lading (B/L) or irrevocable Letter of Credit (L/C) was issued or established prior to the notification of the SRO 598(1)/2022 dated 19.05.2022 shall be exempt from the operation of the SRO.
READ MORE: Pakistan’s March trade deficit widens by only 5.5%
Hence, imported goods for which B/L or irrevocable L/C was established prior to May 19, 2022 shall not be subject to the prohibitions contained in the said SRO.
Moreover, the business community and the general public are invited to share their concerns, proposals or any anomalies with respect to the said SRO at [email protected]. Ministry of Commerce would respond to them at the earliest.
READ MORE: Pakistan’s trade deficit widens to $32 billion in 8MFY22
Previously, the ministry of commerce amended Import Policy Order, 2022 through SRO 587(I)/2022 to ban import of luxury and non-essential items.
The government banned the import of items, included: aerated water and juices; automotive in Completely Built Unit (CBU); sanitary and bathroom wares; carpets (excluding from Afghanistan); Chandeliers and Lightening Devices or Equipment; Chocolates; cigarettes; corn flakes etc.; cosmetics and shaving items; tissue papers; crockery; decoration / ornamental articles; dog and cat food; doors and window frames; fish; footwear; fruits and dry fruits; furniture; home appliances CBU; ice cream; jams, jellies and preserved fruits; luxury leather jackets and apparels; matters and sleeping bags; frozen or processed meat; mobile phones CBU; musical instruments; pasta etc.; arms and ammunition; shampoos, sunglasses; tomato ketchup and sauces; and travelling bags and suitcases.
READ MORE: Pakistan’s trade deficit widens by 92% in seven months
-
FBR notifies promotion of three IRS officers to BS-22
The Federal Board of Revenue (FBR) has officially announced the promotion of three officers from the Inland Revenue Service (IRS) to the highest rank of BS-22.
(more…) -
Sending foreign exchange overseas for trading illegal: SBP
KARACHI: The State Bank of Pakistan (SBP) has said that sending foreign exchange outside Pakistan to overseas foreign exchange trading through any payment channel is not allowed.
The SBP in a circular issued May 18, 2022 said that it had been observed a number of offshore foreign exchange trading, margin trading and contract for difference (CFD) trading websites/apps/platforms (such as OctaFX, Easy Forex, etc.) are offering their products to residents in Pakistan, luring public through social media advertisements to buy their products/services. Such buying by residents of Pakistan is a violation of section 4(1) of the Foreign Exchange Regulation Act (FERA) 1947.
READ MORE: SBP makes permission must for import of mobile phone, cars
Further, it has also been observed that banks are facilitating settlement/ payments through their payment channels to such offshore trading platforms.
The SBP clarified that remittance of foreign exchange directly/ indirectly outside Pakistan to overseas foreign exchange trading, margin trading, and CFD trading apps/ websites/ platforms through any payment channel is not allowed as no general or special permission has been granted by the State Bank under section 5(1) of the FERA.
READ MORE: SBP may raise policy rate by 100bps to 13.25%
The central bank invited attention of banks towards section 4(1) of the Foreign Exchange Regulation Act 1947 (FERA), which provides, “except with the previous general or special permission of the State Bank, no person other than an authorized dealer shall in Pakistan, and no person resident in Pakistan other than an authorized dealer shall outside Pakistan, buy or borrow from, or sell or lend to, or exchange with, any person not being an authorized dealer, any foreign exchange”.
Further, banks attention is also invited towards section 5((1(a)) of the FERA which provides, “Save as may be provided in and in accordance with any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally by the State Bank, no person in, or resident in, Pakistan shall— (a) make any payment to or for the credit of any person resident outside Pakistan”.
READ MORE: Pakistan’s forex reserves fall to $16.37 billion
In view of the foregoing, banks are advised to ensure compliance of aforesaid sections of the FERA and take all necessary measures, including the following, to stop payments to all such forex trading, CFD trading, margin trading websites/apps/platforms by their customers through any payment channel:
— Inform their customers regarding inherent risks and illegality of such trading with any such person/entity.
— Institute a mechanism of ongoing monitoring whereby such trading websites/ apps/ platforms are identified and blocked from making payments through any payment channel.
READ MORE: Current account deficit swells to $13.78 bn in 10 months
In case it is observed that a bank has failed to carry out the measures and has facilitated the transactions as outlined above, the State Bank of Pakistan may proceed against that delinquent Authorized Dealer under relevant provisions of the FERA and take any pecuniary or administrative action as deemed necessary.
-
SBP makes permission must for import of mobile phone, cars
KARACHI: The State Bank of Pakistan (SBP) has imposed condition for payment on import of mobile phones and motor cars.
The SBP issued a circular related import goods making it mandatory for banks to take prior permission for releasing funds for import of motor cars, mobile phones and other machinery.
READ MORE: SBP may raise policy rate by 100bps to 13.25%
In this regard the SBP informed the banks about Chapter 13 of the Foreign Exchange Manual relating to payments against import of goods.
The SBP decided that with immediate effect, the banks would require prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC before initiating transactions for import of goods listed in the enclosed Annexure, subject to following conditions:
READ MORE: Banks increasing dollar rates; FAP tells Prime Minister
The above requirement shall be applicable for all import transactions initiated by Authorized Dealers through (i) issuance/ amendment of letter of credit; (ii) registration/ amendment of contract; (iii) making advance payment; (iv) authorizing transactions on open account or collections basis;
The above requirement shall not be applicable on import transactions initiated by the Authorized Dealers on or before the date of issuance of this circular letter;
Authorized Dealers may approach Director, FEOD, SBP-BSC, Head Office, Karachi, along with appropriate documents and its recommendation on a case to case basis;
READ MORE: SBP governor assumes charge of Asian Clearing Union
Authorized Dealers shall be required to suitably amend the importer’s bank profile in Pakistan Single Window to ensure that the aforementioned import transaction shall not be initiated on open account basis without prior permission from State Bank.
All other instructions on the subject shall remain unchanged. Authorized Dealers are advised to bring the same to the knowledge of all the concerned and ensure meticulous compliance of the above & other applicable regulations on the subject. Authorized Dealers are especially instructed to bring these instructions to the knowledge of their customers and advise them to approach the bank before initiation of import transaction of any item covered under this circular letter.
-
Current account deficit swells to $13.78 bn in 10 months
KARACHI: Pakistan’s current account deficit swelled to $13.78 billion during first 10 months (July – April) of the current fiscal year 2021/2022, State Bank of Pakistan (SBP) said on Friday May 20, 2022.
The balance of payment (BoP) witnessed a deficit of $543 million in the same period of the last fiscal year.
READ MORE: Pakistan’s CAD hit $13.17 billion in July – March
The balance of trade posted a deficit of $32.95 billion during the first 10 months of the current fiscal year as compared with the deficit of $22 billion.
The total trade deficit in both goods and services ballooned to $36.52 billion as compared with the deficit of $24.11 billion in the corresponding period of the last fiscal year.
READ MORE: Pakistan’s CAD mounts to $12 billion in eight months
Balance of primary income recorded a deficit of $41.05 billion during the period under review as compared with $27.83 billion in the corresponding period of the last fiscal year.
READ MORE: Current account deficit widens to $11.58 bn in 7MFY22
The inflows of workers’ remittances increased to $26.08 billion during July – April 2021/2022 as compared with $24.23 billion in the same period of the last fiscal year.
The current account deficit narrowed to $623 million in April 2022 as compared with $1.02 billion in March 2022. The current account deficit in April 2021 was $268 million.
READ MORE: Pakistan’s current account deficit balloons to $9.1 bn
-
Dollar touches new peak at Rs200.14
KARACHI: The US dollar gained 14 paisas against the Pakistan Rupee (PKR) to make new peak at Rs200.14 at interbank foreign exchange market on Friday.
The exchange rate was closed at Rs200 to the dollar a day earlier in interbank foreign exchange market.
READ MORE: Dollar hits record Rs200 at interbank trading
Currency experts said that massive fall in foreign exchange reserves and high import payments were the major reasons behind rupee fall.
Further, delay in IMF tranche of $1 billion after the government decision not to remove subsidy on fuel prices, put further pressure on the exchange rate.
READ MORE: Dollar makes new high Rs198.39 at interbank closing
Pakistan’s foreign exchange reserves fell by $177 million to $16.376 billion by the week ended May 6, 2022. The foreign exchange reserves of the country were $16.553 billion by week ended April 30, 2022.
The country’s foreign exchange reserves hit record high at $27.228 billion by the week ended August 27, 2021. Since then the foreign exchange reserves have depleted by $10.852 billion.
READ MORE: Dollar peaks at Rs195.50 at midday interbank trading
The official reserves of the State Bank witnessed a decline of $190 million to $10.309 billion by the week ended May 6, 2022 as compared with $10.499 billion a week ago.
The SBP reserves reached a record high at $20.145 billion by August 27, 2021. The official reserves also fell by $9.836 billion after reaching record high. The official reserves of the SBP have been reduced to provide import payment cover for only 1.56 months.
READ MORE: Dollar makes new high Rs195.75 at interbank closing
The import bill of the country surged by 46.41 per cent to $65.49 billion during the first 10 months of the current fiscal year as compared with $44.73 billion in the corresponding months of the last fiscal year.
Pakistan is a net importer of petroleum products to meet its domestic demand. The country’s oil bill was $14.81 billion during the first nine months (July – March) 2021/2022 as compared with $7.55 billion in the corresponding period of the last fiscal year, showing a massive growth of 96 per cent. The oil bill is around 25 per cent of the total import bill of the country.